A former executive of Barclays who told subordinates to submit false interest rates in 2008 says he believed his action had been sanctioned by the Bank of England.

Jerry del Missier told a parliamentary committee on Monday that he drew that conclusion from a conversation with the bank's chief executive, Bob Diamond.

Del Missier, former chief operating officer, said he acted on instructions from his boss and did not see anything wrong with what he was doing.

“At the time it did not seem an inappropriate action given that this was coming from the Bank of England,” del Missier told the members of British parliament.

“The entire financial system was hanging in the balance and in the grand scheme of everything that was going on, it didn’t seem a significant event, given the number of significant events that were transpiring at that time,” he said at one point during his testimony.

The explosive evidence directly contradicts statements by Diamond and Paul Tucker, then a senior official at the Bank of England.

“It’s getting murkier and murkier. The scandal is becoming more complex. Now you have the No. 2 guy saying we low-balled for sure, under the explicit orders of Mr. Diamond, and the CEO, who told us he was doing it because Mr. Tucker wanted that,” said Ian Lee, assistant professor of strategic management and international business at the Sprott School of Business at Carleton University.

It also comes as governments in Canada, the U.S. and even Puerto Rico are moving to take action against Barclays and the other 20 or so banks that are responsible for setting the London interbank offered rate, known as LIBOR.

Barclays has been fined $453 million (U.S.) by U.S. and British agencies for submitting false reports of its interbank borrowing rates, data which goes into the calculation of LIBOR.

In turn, LIBOR is the benchmark for dozens of other lending rates in different countries and in different currencies.

After the collapse of U.S. investment bank Lehman Brothers in September, 2008, central banks were bracing for a global meltdown of the financial system.

“There was wrong-doing, no question about it,” Lee said, referring to Barclays. “But if the Bank of England was complicit – and I’m not saying they were – I don’t believe they were doing it to make money. I believe it would have been to prevent a systemic meltdown.”

The testimony comes as Canada’s Competition Bureau embarks on its own investigation.

“I can confirm that the Competition Bureau is currently investigating alleged collusive conduct into the setting of Yen LIBOR rates,” Greg Scott, a spokesperson for the Competition Bureau said in an email. “As this matter is before the courts and the Bureau’s investigation is ongoing, I am unable to comment further.”

The Canadian branch of the Royal Bank of Scotland, which is named in the Competition Bureau court filing, has filed its own court challenge on the grounds that the Canadian government agency is well beyond the scope of its mandate.

There is no indication by the Competition Bureau that any wrong-doing took place in Canada.

Late yesterday, the Ontario Securities Commission, Canada’s main securities regulator, also said it’s “engaged” on issues relating to the setting of benchmark reference rates by banks including the Canadian dealer offered rate.

“We’re engaged in this issue and are co-ordinating our efforts with our regulatory partners, both internationally and domestically, as appropriate,” Tom Atkinson, director of enforcement, said Monday in an e-mailed statement.

The attorneys general of New York and Connecticut are also conducting an investigation tied to alleged manipulation of LIBOR.

New York Attorney General Eric Schneiderman and Connecticut Attorney General George Jepsen are working together in the probe, James Freedland, a Schneiderman spokesman, said in an e-mail to Bloomberg News Monday.

As well, Puerto Rico has lawyers looking at possible legal claims from the suspected manipulation by global banks of LIBOR.

With about $68 billion (U.S.) of outstanding municipal bonds, the U.S. commonwealth is a prominent issuer of U.S. tax free debt and has variable-rate debt tied to the London interbank offering rate, according to Juan Carlos Batlle, president of the Government Development Bank for Puerto Rico.

“We are asking counsel to make an evaluation, and we won't know how much exactly for another week or two,” Batlle told Reuters. “For us, there is no downside. There is some potential upside in claims.”

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